How to Work in Harmony

The seven habits of successful family businesses

Leo Tolstoy’s often-quoted insight, that “Happy families are all alike; every unhappy family is unhappy in its own way” applies to family businesses, as well. Clans that struggle in the family enterprise tend to display a wide assortment of problems mixed into dizzying combinations, ranging from change-resistant patriarchs and over-eager young Turks to alcoholic inlaws and workaholic spouses.

Meanwhile, families that manage to get along in the workplace while building prosperous and enduring enterprises seem to share a more limited set of characteristics.

Here are the most commonly found ingredients in family-business mixes that produce harmony, rather than discord:

Clear communication is perhaps the single most important ingredient in creating an environment where a family can work together. But clarity doesn’t happen by itself. Working communication includes such things as holding periodic family meetings and designing a family code of conduct. Rules on communication often include requirements that meetings stay focused on relevant problems or issues rather than people or personalities.

A code of conduct should prohibit interrupting or using sarcasm, among other elements. While thinking and speaking clearly, family business leaders must remain able to recognize and value individual differences among family members. This may sound simple and obvious, but in fact has proven to be very difficult for some business patriarchs.

Different generations commonly have wide disparities in business philosophies. Business founders, for instance, often exhibit a strong desire to micro-manage, while later generations are more willing to delegate authority. And, of course, different people have different talents and limitations, desires and fears, and opinions and viewpoints. They should all be heard. Valuing differences is not the same as saying anything goes. Management needs to provide clear roles with defined responsibilities for each employee.

Keeping work expectations vague is a mistake. When a young family member joins the company with a lofty-sounding title, the specific job requirements need to be spelled out so that everyone under understands where his or her responsibilities begin and end.

Laying out responsibilities means little without a commitment to hold every employee accountable. If a family member is not executing responsibilities according to expectations, don’t ignore the problem.

The remedy may initially be nothing more than a heart-to-heart talk. But whether it ends there or progresses to stronger guidance, there needs to be a process for measuring performance.

Well-governed family businesses establish appropriate boundaries between family and business. Family members should separate their personal and work lives.

For instance, if a family member is out of town on a personal trip, non-emergency business interruptions should wait until the family employee is back on the clock. Such boundaries are essential to keeping the family business in the good graces of other family members.

Set boundaries to include family members in business decisions and discussions, where appropriate. People appreciate being asked for their opinions or at least being kept informed. For example, a family shareholder—even one not actively involved in the business—probably should be kept abreast of developments in a scenario that could significantly impact the value of his or her holdings. The same doesn’t apply to routine decisions that concern only those involved in day-to-day management.

Some business families are famous for being close-knit, but those that create longlived enterprises rarely exclude all outsiders. The most successful are willing to tap into valuable knowledge outside the family. This may take the form of adding outsiders to a board of directors, hiring non-family executives to pivotal positions, or employing trusted outside advisors.

As Tolstoy suspected, the structure for harmoniously working together doesn’t vary greatly among business families. As long as leaders are willing and able to follow the prescription, they can avoid the fate of families that can’t work together.